L to r: Tom Parlon, Director General, CIF; Minister Pat Breen, TD; Helen Downes, CEO, Shannon Chamber; Eoghan Murphy TD, Minister for Housing, Planning and Local Government; Mary Considine, President, Shannon Chamber; and Gordon O’Regan, CEO, L&M Keating.
Minister Eoghan Murphy calls for reform of procurement policy to enable construction sector to deliver Government’s National Planning Framework & National Development Plan
Speaking at a recent Shannon Chamber of Commerce event in Dromoland Castle with Minister Eoghan Murphy TD, Minister for Housing, Planning and Local Government, Gordon O’Regan CEO, L&M Keating said the procurement rules for large publicly funded infrastructure and housing contracts in this country are not fit for purpose and are forcing construction companies out of business every week.
“Government must act now to make public procurement rules compatible with viable businesses. The tight margins on these contracts cannot continue without wiping out a large section of the Irish construction industry,” he said.
“This Government has laid out an ambitious infrastructure plan in Project Ireland 2040. This policy and planning framework for the social, economic and cultural development of our country is a powerful one with huge potential, but if it is to succeed it will need an agile construction sector that can respond to the needs of government. The current procurement rules that govern large infrastructure and housing projects in this country must be reformed in line with best international practice. The rules today have allowed a ‘race to the bottom’ to take hold where price is the main determinant of successful bids. This is a dangerous and destabilising model that if allowed to continue could decimate large tracts of the indigenous construction sector in this country.”
He added that the recent well-publicised collapse of several construction groups operating in the Irish market lays bare the perilous position that many Irish construction companies find themselves in as they navigate public procurement rules. “The Government must change the procurement rules to help the construction sector build the necessary financial and technical resilience necessary to deliver on Project 2040 and beyond. The margins and risk under which construction groups are forced to operate these state contracts are perilously tight and unsustainable. It makes sound economic sense for government to change the contracts if they want to see the national planning framework and development plans delivered.”
Gordon O’Regan was speaking at the Shannon Chamber summer lunch in Dromoland Castle Hotel at which Eoghan Murphy TD, Minister for Housing, Planning and Local Government was the keynote speaker.
The lunch was sponsored by L&M Keating and the Construction Industry Federation (CIF) and was attended by representatives from industry in the Shannon region who are keenly interested in maximising the potential of the region.